Class Warfare, Wisconsin-Style

Governor Scott Walker of Wisconsin is facing a recall fight for his job. A million voters in his state decided that after just a year or so in office, they’d had enough of the man and wanted him out. The main issue here, the main cause of anger toward the governor, involves his taking away collective bargaining rights from most state government workers.

Sure, at a time when governments like Wisconsin’s are fiscally hard-pressed, state government workers have to take some hits. But they agreed to these hits in collective bargaining sessions. What, then, is Walker’s justification for also going after their future collective bargaining rights?

I heard him explain his position the other day in a TV news interview. I found it a most curious exercise.

He claimed he was not only protecting hardworking taxpayers from predatory union members, but these members themselves from union bosses who make money from dues members are required to pay. His actions were thus not only justified, they weren’t even union busting. That was his argument.

So in Walker World, it seems, there are two distinct classes: hard working taxpayers led by elected officials who don’t tell voters what they actually plan to do before getting elected; and a different class of predatory, over-compensated government workers who in turn are exploited by their own union leaders (oops, I mean ‘union bosses,’ I gotta get the Walker World nomenclature right).

The inanity of this argument is awesome: Don’t government workers in Wisconsin work hard like other hard-working Wisconsin workers, or is government work there a kind of sinecured, no-show thing? Don’t they also pay taxes, or is there something in the state constitution that exempts them? And isn’t the appropriate job of union leaders (oops, I mean bosses), the job these people are paid to do, to protect the interests of their members, just as it’s the obligation of corporate managers to protect the interests of stockholders?

That fact that Governor Walker’s message is illogical, nasty, small-minded and vulgar aside, what I found so curious here are two other things: How could anyone possibly take this rap or the person spewing it seriously? And in a larger scale, how can anyone possibly listen to Republicans around the country who keep prattling about Obama’s purported class warfare positions, when they are such avid practitioners of class-based divide and rule?

A suggestion, friends. Listen carefully to Governor Walker and his ideological soul mate in the House of Representatives, Paul Ryan. Then consider the pattern of what they are espousing and where it would lead.

First they come after the government unions, and because you aren’t a union member you go along; then they cut food stamp entitlements, and because you don’t require food stamps to eat regularly you go along; then they cut taxes for the rich paid for with reductions in college aid, and you go along because you don’t have any kids in school at present.

There is a bit of a difference in my mind in public sector unions. These unions negotiate with elective officials that often they support, fund, etc. Unions are by far the biggest political contributors in this country and have often gotten sweetheart deals because of it. I realize that when some hear unions they automatically think back to the days when people struggled to receive a living wage under unsafe working conditions but the playing field is vastly different nowadays. Workers are forced to join unions to do some jobs in many states. Often even if they refuse to join the employer still withholds dues from their pay. Individual members may have little say in what have grown to become giant organizations, and the unions have many of the unions have become way to much about the “union” not about the members or what they want or believe. Basically in many cases I think unions have become just another business and all they care about is surviving and growing not about what’s good for the members but whats good for the union.

I also think calling Walkers actions “union busting” is a bit much. Unions can no longer have their dues deducted and public service unions can’t collective bargain right? But since they are still the biggest political donors in the State I think they can manage not to get tanked to hard on wages and if they do provide such great services why should they have a problem collecting dues?

Rcoutme

EE: are you being tongue in cheek here? Unions are the biggest contributors?? What???

By the way [expletive in noun form], Walker also made it against the law for public employees to get a raise higher than the inflation rate! This means, wait for it…that the only possibility is that they will LOSE ground against inflation. Why? Because in the years that they do not get a pay raise equal to inflation, they lose. Then, in a good year, they can only break even with the new inflation rate.

In addition: They now can no longer negotiate: 1) how much they have to contribute to a pension fund 2) whether or not that fund can be raided by Walker and his thugs 3) how much they have to contribute to their health insurance (i.e. unilaterally they can be forced to pay the WHOLE THING) 4) whether or not they get reasonable (key word here) compensation for being hurt on the job 5) whether or not they have disability insurance (they don’t pay SS, so they don’t have that backstop!) 6) whether or not their sick days, vacation days, holidays, etc. are EVEN BLEEPING OFFERED!

The only recourse they would have is to quit! If Walker remains governor and this law stays on the books, ever public employee (not in federal gov’t) should, in fact, quit! If I were a teacher (or any other of the myriad employees needed by the public) in Wisconsin, I would do EXACTLY THAT!

Quelcrist Falconer

I realize that when some hear unions they automatically think back to the days when people struggled to receive a living wage under unsafe working conditions but the playing field is vastly different nowadays.

Tell that to the suckers who are working in slaughterhouses…

Despite all the injuries and the pain, the frequent trips to the hospital and the metal brace that now supported one leg, Dobbins felt intensely loyal to Monfort and Con-Agra, its parent company. He’d left home at the age of 13 and never learned to read; Monfort had given him a steady job, and he was willing to do whatever the company asked. He moved from Grand Island, Nebraska, to Greeley, Colorado, to help Monfort reopen its slaughterhouse there without a union. He became an outspoken member of a group formed to keep union organizers out. He saved the life of a fellow worker—and was given a framed certificate of appreciation. And then, in December 1995, Dobbins felt a sharp pain in his chest while working in the plant. He thought it was a heart attack. According to Dobbins, the company nurse told him it was a muscle pull and sent him home. It was a heart attack, and Dobbins nearly died. While awaiting compensation for his injuries, he was fired. The company later agreed to pay him a settlement of $35,000.

Today Kenny Dobbins is disabled, with a bad heart and scarred lungs. He lives entirely off Social Security payments. He has no pension and no health insurance. His recent shoulder surgery—stemming from an old injury at the plant and costing more than $10,000—was paid by Medicare. He now feels angry beyond words at ConAgra, misused, betrayed. He’s embarrassed to be receiving public assistance. “I’ve never had to ask for help before in my life,” Dobbins says. “I’ve always worked. I’ve worked since I was 14 years old.” In addition to the physical pain, the financial uncertainty, and the stress of finding enough money just to pay the rent each month, he feels humiliated.

That’s what happens when the bosses and there is no one to protect the workers…

slamfu

Unions have their bad sides, like any large group. But overall their effects are very positive. You want to see what the world looks like you can either:

a) Look at what life was like for Americans before unions were around. You’ll find extremely low wages, horrid working conditions, and what’s that you say about a middle class? Companies did things so awful to working people that today it could hardly be believed. Over the century unions have done such a good job making life better that people have forgotten what life was life without them.

b) Simply look at nations today that don’t have them to see what life is like. Its the SAME crap that was being pulled on American’s before the rise of unions put a stop to it.

Some Americans seem to think that without unions there would be some sort of justice, safety and a living wage by denying the workers the ability to bargain collectively. That somehow individuals are going to go up against large corporations without being squashed. Its pure fantasy, conflicts with everything history has to show us, yet fools seem to think its different today. This seems to be pattern with Americans. A big problem exists, a solution to fix it comes along, it fixes it, and after a certain amount of time we seem to think that the problem no longer exists, and the solution put in place is no longer needed. Examples:

1) Financial regulation separating commercial from investment bankers. Put in place after the crash of 1929.

2) Food supply and subsidies. Again, after the markets caused the ruin of our ability to feed ourselves we decided to put subsidies in place to make sure we don’t run out of available food in the markets. We’ve gotten so good at feeding ourselves now that the idea the food production chain could be disrupted has seemed laughable, even though the exact same thing could happen again.

3) Anti Trust. The idea we can break up companies that get too big is now seen as a the ultimate in govt intervention. How dare we tell a company they can’t be that big, your destroying the free market! End result, they screw up and taxpayers end up picking up the tab or else we watch the economy go in the crapper.

The list goes on and on.

EEllis

One we do’t live 100 years ago we live now and need to make decisions about how we proceed based on whats going on today. The historical value of unions don’t automatically extend to the current day.

two unions are very politically powerful but do give solely to Dem canadates. # out of the top 5 donors in 2010 were unions, two of them teachers unions, and 10 out of the top 20 are unions. Unions are heavily involved in the recall efforts in \Wisconsin including, I kid you not, We are Wisconsin Political Fund which raised about 11 mil and is funded totaly by out of State unions. Doesn’t anyone else get a kick out of that name? The Greater Wisconsin Committee gets most of it’s funding from State unions and is a major force in State politics. It spent over 2 mil in the recent state senators races to try and boot out 9 senators that voted with Walker. They have already spent almost a mil on 3 tv ads that have been playing state wide since Dec. The idea that without strikes these union folks have no juice is just absurd.

EEllis

that should be 3 out of the top 5 donors in national elections were unions including the #1 spot

slamfu

Why shouldn’t they? Unions are like corporations except they represent a lot of actual people.

Dr. J

Some Americans seem to think that without unions there would be some sort of justice, safety and a living wage by denying the workers the ability to bargain collectively.

Yet the 88% of Americans who aren’t in unions seem to scrape by somehow.

MICHAEL SILVERSTEIN, Wall Street Columnist

What I find so terribly, terribly sad in most discussions about unions these days is that the debate has been poisoned by narrow interests that have successfully peddled the idiot notion that labor and management are inherently at odds. That if you believe in growing companies you have to crush a workforce to do it.

Unions, at least those that have been allowed to mature, are inherently conservative institutions. They work well with intelligent management that maximizes labor talent for its own benefit and shares some of the resulting goodies.

Walker, Ryan and their ilk are swimming in Ayn Rand-tainted thought waters, where the prevailing ethic is that only those who push others under can stay afloat.

We long did a lot better in this country. We can, should, and will do so again.

Dr. J

Michael, I agree with your first paragraph. Union and management have many interests in common, and it’s a shame they aren’t able to align on them more often.

But the greater blame belongs on the union’s doorstep, because they won’t participate in any attempts to maximize labor talent. They’re not meritocracies. They represent incumbency and inertia, and rather than challenge their members to excel, they shield them from challenges wherever possible. Like any organization that refuses to stand by the quality of its product, they’re losing market share.

Walker may be an overzealous headsman, but unions are headed for a self-determined death one way or another. It’s a shame.

EEllis

Why shouldn’t they? Unions are like corporations except they represent a lot of actual people.

Never said they shouldn’t I said that because they do they have a crap load of influence anyway even after removing some of their previous privileges.

Quelcrist Falconer

Yet the 88% of Americans who aren’t in unions seem to scrape by somehow.

The figures, which appear in Table A-5 at the back of the Census Bureau’s report (pdf), are these. Median earnings for full-time, year-round male workers: 2010—$47,715; 1972—$47,550. That’s not a typo. In thirty-eight years, the annual earnings of the typical male worker, adjusted to 2010 dollars, have risen by $165, or $3.17 a week.

If you do the comparison with 1973 it is even worse. The figure for median earnings of full-time male workers in that year (when O. J. rushed two thousand yards and Tony Orlando had a chart-topper with “Tie a Yellow Ribbon Round the Old Oak Tree”) was $49,065. Between now and then, Archie Bunker and Willie Loman have suffered a pay cut of more than twenty-five dollars a week.

That’s really scraping by…

MICHAEL SILVERSTEIN, Wall Street Columnist

Hi Dr. J,

I disagree with you about where the greater blame lies. I think these days it lies far more with corporate heads who don’t want unions to do the same things they are doing in their own businesses on a daily basis to succeed — bargain hard.

You offer a good company widgets for $100 per. They bargain it down to $75 per. The best companies also pay good compensation to their best managers, and set aside a hefty something to see that governments that affect their interests hear the company side of the story.

Shouldn’t unions bargain hard? Isn’t that what they exist to do on issues critical to their members? The Walker idea that oh, yes, you can still exist, but you can’t bargain for what you really want. And oh, yes, we’ll also cut your main source of funding so you can’t employ your own best managers and try to infuence govrnment decisions that affect your members, but we’re not union busters.

Am economy is labor and management. The latter, these days, seems intent on crushing the former in revenge what the latter is doing itself.

This isn’t immoral. It’s just plain stupid if one wants to crate a healthy economy.

Dr. J

QC, you raise a big problem. The question is whether more unionization would help. Higher wages (at the same level of productivity) will mean higher prices for goods and services. It seems like a zero-sum game.

Dr. J

I think these days it lies far more with corporate heads who don’t want unions to do the same things they are doing

Michael, here in San Francisco the buses run late in large part because drivers don’t show up for 12% of their scheduled runs. Union rules permit that.

I don’t begrudge the unions fighting for their interests, but a 12% absence rate is a month and a half per year. That strikes me as excessive and suggests that the driver’s has have too much power, since they can exact terms like this from the city. I sure don’t get to blow off work a month and a half per year; I have to show up, and it would help if the buses ran on time. Does that make me an evil corporate head?

slamfu

“Yet the 88% of Americans who aren’t in unions seem to scrape by somehow”

How many of those 88% are working for Wal-Mart or a similar place that pays crap to its employees no matter how high their profits go? Considering we have what, 45% of America making so little money they effectively don’t pay taxes, the median income has stagnated for over a decade while costs go up, and the middle class no longer has enough purchasing power to keep the economy going, you somehow think this statistic is one in favor of your point? The reduction in unionized labor has paralleled the reduction in income growth. This is not a coincidence.

slamfu

Dr. J, don’t get me started on MUNI. They are probably the greatest example I have ever heard of for how screwed up unions can get. I’m not saying unions can’t go overboard, they certainly can and MUNI is a prime example. There has to be a give and take, but without unions seriously, we get children working 16 hours shifts in coal mines that have never seen a safety inspection.

Let me just leave you with one statistic. Between 1900 and 1979, the number of work related deaths per dollar of GDP fell by 96%. Companies were forced, by many places but unions especially, to make safer working conditions. The point is that this is not just financial. The people that run comapanies have shown time and again that left to their own devices, they would rather let people die in droves than have it affect their bottom line. That is the mentality we are dealing with. Back then, and now.

slamfu

Inflation adjusted GDP btw in that stat above. We didn’t increase GDP to the point it looks like we are saving lives 🙂

Dr. J

The reduction in unionized labor has paralleled the reduction in income growth. This is not a coincidence.

Many things have paralleled the reduction in income growth, such as globalization and the increasing size of government. Sorting out what caused what is tricky.

But if you believe there’s a causal relationship to union membership, perhaps you can answer my question to Quelcrist and explain how higher unionization would make people richer. If you make more money but every good or service costs more as a result, how are you better off?

slamfu

Ok, first more unionization generally means an increase in the median wage. The increase in wages does not correspond to a identical increase in product end pricing.

For instance, wages and associated fees make up 40% of my monthly budget of $100. If I double my workers wages, my costs go up to to $140. Basically I need to charge 40 percent more, meanwhile my people have twice as much to spend on things. That assumes I insist on making as much money before as after. Often, the companies will make less profit, the theory being they were making a ton before and not really sharing with the workers. Again, there is some give and take. The company owners give up some profits and the works take home some more money.

This assumes some inequity on the part of the profit sharing before the wages go up. I think these days it is quite apparent that many companies have a good bit of that going on. If there isn’t any inequity, the company is basically giving a reasonable percentage of its profits back to the employees, then there is little need for unions. Sadly, this is often not the case in labor related industries.

Incidentally, you end up with more money in the economy, and everything goes up.

slamfu

Another point to be made about this. Typically these increased wages go to the middle class type families. People in the middle tend to spend much more of their money on goods and services than say, someone making $10million/year. If I was making $30k/year, and now I make $50k, that 20k doesn’t go into the bank usually. What ends up happening is I buy more stuff. Tangible stuff. Money in the hands of the middle class does not usually end up overseas or in a circle jerk non goods production sector like the derivative market. This represents a big driving force in the overall market spread across 100 million or so American middle class consumers. Essentially when the market forces come together to keep the median wage flat, the market is essentially choking off its own supply of revenue. They supply of demand you could say. That is when we get a recession. Also, when major financial institutions manage to leverage all their deposits and assets in a giant game of musical chairs and siphon about $4-5 Trillion out of the economy at the same time.

Dr. J

I’m not saying unions can’t go overboard, they certainly can and MUNI is a prime example. There has to be a give and take, but without unions seriously, we get children working 16 hours shifts in coal mines that have never seen a safety inspection.

So I’m confused. You’re saying Muni has gone too far, but you seem to be agreeing with the OP that any incursion on public unions’ bargaining power is part of a slippery slope and must be resisted. What are you imagining might rein Muni in?

MICHAEL SILVERSTEIN, Wall Street Columnist

Good discussion. But let me note something that hasn’t been noted and really should be. You can increase worker wages and benefits via unionization (or other means) simply by reducing corporate profits.

Through the mechanism of conservative propagandizing over the years, this seems to no longer to be part of every day decision making. It’s like taxes and spending. You take more taxes on the wealthy off the table, what’s left is only less spending on needed government programs. You take the largest possible corporate profits as the only aim for an economy, and of course lower wages for workers and fewer benefits become inevitable.

Personally, I haven’t fallen for these ‘inevitables,’ these ‘red lines,’ these 1920s-era ‘must-dos.’ For me, a reasonable apportionment of the economic goodies is the only obvious way to run a civilized society.

Dr. J

True, Michael, but lower corporate profits means lower returns on workers’ pension funds and 401(k)s. We’d still primarily be moving money from one set of middle class pockets to another.

The other problem is higher wages for the same productivity means fewer jobs. The bigger premium above market wages unions manage to negotiate, the more they push consumers to buy from somewhere else.

On the other hand, there’s a more sustainable way to command higher wages: earn them through higher productivity. I would love to see unions adopt that strategy, becoming centers of excellence, helping and challenging their members to get better and better at what they do. Instead I see them acting as centers of mediocrity and stasis. No surprise that that’s reflected in their paychecks.

slamfu

Productivity has never been a problem for us. The US has been the top or near the top of worker productivity worldwide for decades. You are subscribing to a meme most people who don’t like unions like to throw out there, that union workers are lazy and unproductive. While I’m sure in this nation of 300 million you will find certain cases of that, overall the system of unions does not decrease productivity. The facts do not support that argument.

You other argument that workers can’t be paid more because it would hurt profits, and therefore stock prices would go down and hurt those same workers 401k’s is kind of silly. Having a middle class with disposable income is what drives businesses overall. I would refer you to the 90’s. As a counterpoint, I would refer you to the years of Bush, 2000-2008. Corporations will do just fine, as long as they have customers for their products.

Dr. J

Slam, those are unfair characterizations of what I said. I’m not making a value judgment about union workers, I’m saying they’re producing a certain amount and getting paid a certain amount. If they want to get paid more, producing more would be a great strategy.

I disagree that productivity has never been a problem for us. It’s a huge problem. Our jobs are disappearing overseas because we’re competing with foreign workers, and they’ve been getting more productive. We may still be ahead in absolute terms, but that’s cold comfort to the Americans seeing their jobs offshored. We’re not far *enough* ahead to justify our much higher wages.

Nor did I say workers can’t be paid more because it would hurt profits. It was Mr. Silverstein’s suggestion that workers could be paid more without increasing prices by taking the money out of corporate profits. I’m simply pointing out the consequences. Corporate profits get paid to shareholders as dividends or stock appreciation, and for public companies those shareholders tend to be large institutional investors managing all of our retirement accounts. Lower profits = smaller dividends = lower mutual fund returns = leaner retirements.

You may figure that a leaner retirement is a good trade for more income now, and fair enough. I’m not offering an opinion on that. I’m just pointing out there’s a cost to paying people more, and it will tend to be borne by the same workers you’re trying to help.

bluebelle

Slamfu –I was going to comment but I read your comments and all I can say now is that you made some great points — especially about life in the US before unions. People were beaten up for talking to a union rep — and the union organizers were seen as commies– it was a very dangerous profession.

The right seems like its on a roll on its long term agenda to rollback the progress the unions have made along with their crusade to limit voting rights and curtail laws that protect women